The Hindu : Business : Miners want roll back of export duty on ore

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Miners want roll back of export duty on ore

Special Correspondent

Rise in freight charges results in drop in railway indents

Federation projects 15-20 % drop in shipments
Operating margins come down to 10-12 %

NEW DELHI: Making out a case for rolling back the duty hike, mining industry on Thursday said that iron ore exports have sharply dropped by up to 20 per cent in the last one month after the imposition of 15 per cent export duty and upward revision of freight charges. Addressing media persons here on Thursday, Federation of Indian Mineral Industries (FIMI) President Rahul Baldota said, “Iron ore exports have become unviable for Indian miners due to the 15 per cent advalorem export duty, increase in freight charges and decline in prices of ore in the global market.”

Projecting the drop in exports to be in the range of 15-20 per cent, the FIMI President said out of the total iron ore production of over 200 million tonnes, India exports about 100 million tonnes (of fines) while nearly 85 million tonnes wee consumed by the domestic steel industry.

Unviable exports

FIMI, which is the apex body of Indian miners, claimed that rail freight for iron ore export had increased by almost 70 per cent in the last few months.

The hike in freight charges was equivalent to around 15 per cent of freight on board (FOB) realisation of the ore.

In support of the projection made by him, Mr. Baldota said, “In Karnataka alone, the number of railway indents requisitioned to ferry iron ore to ports have declined from 20,000 a few months back to just about 1,000 now.”

He explained that after the recent hike in rail freight, movement of iron ore to ports was being done through road and exporters were cancelling the indents. Demanding roll back of export duty, imposed by the government on June 13 to increase availability of the raw material for the steel industry, FIMI President said India stood the chance of losing a valuable foreign exchange reserve of $10 billion if exports continue to be unviable. He also said that operating margins from exports have come down to 10-12 per cent as against 30-35 per cent earlier.

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